Lottery game with pari-mutuel payout

ABSTRACT

A multi-group lotto game which allows for groups having differing payout structures and prize percentages. A first group has a pari-mutuel payout structure providing variable prize levels and a fixed cyclical prize percentage and a second group has a fixed prize level and variable prize percentage approaching a target over a statistically long period of time. Prize levels may be calculated in a variety of ways, for example as fixed percentages of prize sales or as a hierarchical cascade of percentages.

FIELD OF THE INVENTION

This invention relates generally to lottery games and, morespecifically, to lotto games that are adapted to be played amongst anumber of groups which may have different lottery pay-out rules.

BACKGROUND OF THE INVENTION

Many different types of lottery games have been sold over the course ofhistory in various jurisdictions. The “traditional” game has been soldfor several hundred years. This game is based on the concept of araffle. Generally, tickets are sold with unique numbers. The drawingmechanism is developed, often using balls, sometimes thousands of them,each with a unique number corresponding to a ticket. Other timesindividual digits for winning numbers are drawn from a series ofmachines. The drawings are held so that a large prize and subordinateprizes are paid according to the unique numbers drawn and delegated to aparticular prize level. Sometimes subordinate prizes are paid formatching part but not all of the numbers as long as the digits beingmatched are a subset of the digits on the balls drawn in exact order.

Instant lottery tickets, also called scratch tickets, were invented inthe second half of the 20th century. They utilize a secure printingmedium with numbers or symbols covered by latex or some other material.The covering is scratched and players win prizes by adding up, liningup, or matching covered symbols. Various patents have been issuedrelative to the substrate, security precautions, symbol coverings, andplay styles for these types of games. They now account for roughly halfof lottery sales in North America.

Another type of lottery ticket is the pull-tab ticket. It utilizeslayers of cardboard glued together, with one layer having a series ofperforations to form tabs. As the tabs are pulled away from the ticketthey reveal symbols underneath and matching various combinations ofsymbols leads to the winning of prizes.

The last category of lottery type games are generally referred to aslotto games and are based on the concept of picking numbers. These gamesusually involve players picking their own numbers or using a computer orsome other mechanism to chose the numbers, in an attempt to match thenumbers against those drawn by the lottery. The lotto concept wasoriginally developed in Italy about 1580. It evolved from bets beingplaced on which candidates were chosen at random to serve in the senate.The betting was so popular among the citizenry that the incidence of thedrawings was increased and the names of senators changed to numbers.

One of the most successful lotto type games in modem times is commonlyknown as pick 3. Players choose three digits from zero to nine. Thelottery chooses three digits from zero to nine. If the player's numbersmatch the lottery's numbers in exact order, a top prize is won. Otherbetting variations can be made where a player chooses to mach the twofront digits, the two back digits, the first and last digit, or somecombination of the above. The game was typically ran manually andillegally by crime networks for generations in large cities in theUnited States. State lotteries began to offer the game and computerizedit so that it could be played efficiently on a daily basis. A similargame has been developed for matching four digits.

Another typical lotto game in the United States and much of the rest ofthe world involves establishing a field of numbers from one to X. Aplayer chooses, say, six of these numbers. The lottery then draws sixnumbers and a top prize is won if all numbers match in any order. Theodds of winning the top prize can be altered by making X a largernumber. In doing so there will be fewer winners of the top prize, whichallows lottery sellers to offer a large jackpot prize. The prize canfurther be enhanced if no winner is chosen in a particular drawing. Thelottery is then able to bank part or all of the non-won prize money froma previous drawing and offer it as an incentive for sales in asubsequent drawing, by increasing the size of the jackpot. In typicallotto games of this nature, subordinate prizes are also awarded for thematching of five, four, or even three of the six numbers drawn in anyorder. A typical prize structure for a pick 6 out of 30 game is to paythe jackpot prize if all 6 matches are correct, the approximate averageodds of which are 1:593,775; pay $100 if there are 5 matches, theapproximate average odds of which are 1:4,124; pay $10 if there are 4matches, the approximate average odds of which are 1:144; and provide afree play if there are 3 matches, the approximate average odds of whichare 1:15. Of course, the allocation of prize money to be divided issubject to selection or design for each ticket sold.

Keno is a lottery game in which the house draws a number of balls, say,from a group or field of balls that is larger than the number of ballsselected by a player, but any match between the balls selected by theplayer to the balls drawn by the house counts. Lotto games are actuallya subset of keno games; in lotto games, the number of balls drawn by thehouse or lottery equals the number of balls picked by the player.

In contrast, higher prizes can be offered by establishing a matrix ofdifferent size. If a game is chosen where the goal is to match 6 of 49,then a typical prize structure may be to pay out $2,000,000 if there are6 matches, having an approximate average number of prizes for eachdrawing of less than one; $65,816.40 if there are 5 matches and a matchwith a bonus number, having an approximate average numbers of prizes foreach drawing of 8; $1,784.80 if there are 5 matches, having anapproximate average numbers of prizes for each drawing of 236; $68.10 ifthere are 4 matches, having an approximate average numbers of prizes foreach drawing of 11,857; and $10 if there are 3 matches, having anapproximate average numbers of prizes for each drawing of 213,760. Avariation of this game with smaller top prizes but better odds is a pick5 game, a game involving matching five numbers by the player's choice inthe drawing in any order. There is also a variation with seven numbers.

Another variation on this concept has emerged in the last decade,typically called “rolldown” in the United States. In a rolldown lottogame everything proceeds as in a typical pick six or pick five lottogame, as above, except that in the event that there is no jackpotwinner, prize money that has not been won is allocated to smaller prizesrather than being banked to enhance subsequent jackpots. Therefore thelack of a jackpot winner provides money to enhance the size of theprizes for lower tier winners. A typical prize structure and relativeoccurrences for a pick 5 out of 55 rolldown game may be to pay thejackpot if all 5 numbers are matched, the probability of which is1:3,478,761; pay $500 if 4 numbers are matched, the probability of whichis 1:13,915; pay $10 if 3 numbers are matched, the probability of whichis 1:284; and pay $1 if 2 numbers are matched, the probability of whichis 1:18.

In some instances a bonus ball can be added to a lotto game to create aprize smaller than the jackpot prize but larger than any of the otherprizes. So, for instance, in a pick six lotto game a player matches onlyfive of the six numbers drawn by the lottery; however, the lottery hasalso drawn a seventh ball, the bonus ball, which if paired with any fiveof the six other numbers drawn by the lottery creates a prizeintermediate between matching five and matching the six original ballsdrawn.

In the last decade a new high jackpot game was developed calledPowerball® (Multi-State Lottery Association, West Des Moines, Iowa). Itwas emulated by the Big Game in the United States (now Mega Millions),by Powerball in Australia, and similar games introduced in othercountries. Unlike lotto, where the player picks six balls from one to Ndrawn by the lottery, the player instead chooses five numbers from oneto X, and one number from one to Y. The lottery then draws five numbersfrom one to X and one number from one to Y from separate drawingmachines and prizes are awarded according to various matches. ThePowerball® lottery game is a combination of two lotto games in one. Bothgames must be won to win the jackpot prize. It is also designed so thatany player matching the single ball drawn from the one to Y device winsa prize. The concept has been extraordinarily successful. Table 1 laysout a prize structure applicable to a typical Powerball® lottery game.TABLE 1 Prize Structure for a Double Lottery (5/49 + 1/42) Game-One Playfor $1 Number of Prize % Odds Winners Prize Levels Prize Cost of SalesMatch 5 + 1 80,089,128.00 1 $46,762,840 23,381,420 29.1942 Match 5 + 01,953,393.37 41 100,000 4,100,000 5.1193 Match 4 + 1 364,041.46 2205,000 1,100,000 1.3735 Match 4 + 0 8,879.06 9,020 100 902,000 1.1262Match 3 + 1 8,466.08 9,460 100 946,000 1.1812 Match 3 + 0 206.49 387,8607 2,715,020 3.3900 Match 2 + 1 604.72 132,440 7 927,080 1.1576 Match 2 +0 14.75 5,430,040 0 0.000 Match 1 + 1 117.99 678,755 4 2,715,020 3.3900Match 1 + 0 2.878 27,828,955 0 0.0000 Match 0 + 1 73.75 1,086,008 33,258,024 4.0680 Match 0 + 0 180 44,526,328 0 0.0000 Totals 1.0080,089,128 40,044,564 50.0000 Overall Odds: 34.76 2,303,805

Although the player is still only picking six numbers, drawing them fromtwo separate fields can greatly increase the odds of matching allnumbers correctly while maintaining relatively good odds of low levelmatches. The number of different intermediate prize levels that can alsobe offered is greater than that available for a pick six lotto gamebecause there are more possible combinations of matches that can be madeby the two separate fields and two drawing mechanisms. For instance, ina pick six game the only possibilities of matches are to ultimatelyguess six, five, four, three, two, one and zero numbers; a total ofseven choices. Therefore only seven prize levels can be offered.However, with the concept of the Powerball® lottery game, there areeleven possible matches.

Because the odds of winning the Powerball® lottery game are so high(i.e., 80 million to one) the generation of frequent wins to amass cashsubstantial enough to keep players' interest requires a sizable audienceof lottery customers. Therefore games with odds of this magnitude areparticularly suited for multi-jurisdictional lotto games. The combinedpopulation makes the game possible. A certain fraction of each ticketsold is pooled by each of the participating partners for purposes ofestablishing a jackpot prize pool. The size of the top prize and theodds of winning it go hand in hand. The ability to make the game dynamicdepends on per capita spending over a large player base. However, astime progresses lottery players can become jaded to the size of theprize so the matrix must be changed to make the odds of winning ajackpot stiffer, sacrificing the frequency of jackpot winners. In otherwords, fewer but larger jackpots are won over the course of time. With afixed population base eventually the number of jackpot winners maydecline to the point where players may lose interest. Clearly the sizeof the jackpot is important in the United States, as has beendemonstrated by United States lotteries. After achieving a new recordjackpot, sales for lower jackpots generally are reduced, a phenomenonknown in the Industry as “jackpot fatigue.” For example, the Powerball®lottery game must now achieve a jackpot of $50 million to have the samesales that once occurred for a jackpot of $20 million.

So there exists a dilemma. Expanding the odds to increase the size ofthe jackpot works in the short term but causes players to become jadedand sales to decline over time. Meanwhile, raising the odds furtherreduces the number of jackpot winners as jackpot fatigue sets in andplayers lose interest in infrequent jackpots and sales decline. Thesolution is to expand the player population base while expanding thesize of the matrix and increasing the odds for the top prize. Doing soincreases jackpot size without adversely affecting frequency of wins.Doing so also has certain limitations, usually characterized bypolitical boundaries. The multi-jurisdictional Powerball® lottery gamehas achieved its success by assimilating the cooperation of multipleUnited States jurisdictions. All of these jurisdictions operate under acommon national flag with a common language and a common currency. Forpolitical reasons expansion appears to be limited within the UnitedStates and therefore it is desirable to partner with lotteries outsideof United States borders. However, the expectations of players outsidethe United States, the regulatory systems under which they operate, andlimitations on the size of jackpot prizes pose an impediment to thismatrix expansion. Furthermore, currency differences suggest that thesize of prizes based on a fixed prize pool can vary from day to day fromone jurisdiction to another, depending on the foreign exchange rates forthe currencies in respective countries. Therefore, the challenge is tofind a way to accommodate jackpot limitations, regulatory systems, andcurrency differences in such a way as to offer a game with enhancedvalue compared to existing games in all jurisdictions.

SUMMARY OF THE INVENTION

According to a first embodiment, the present invention provides a prizepool for a lotto game played among a plurality of member lotteries inwhich at least two of the member lotteries are from diverse groups. Theprize pool is comprised of a system of prize levels including a jackpotprize level and a subordinate prize level, wherein all member lotteriesare eligible for the jackpot prize and wherein a first member lotteryawards subordinate prizes having a pre-determined fixed monetary valueand a second member lottery awards subordinate prizes on a pari-mutuelbasis. According to a second embodiment, the lotto game is comprised ofa plurality of levels of subordinate prizes. The second member lotteryawards a first subordinate prize equal to a fixed percentage of a secondsubordinate prize.

BRIEF DESCRIPTION OF THE SEVERAL VIEWS OF THE DRAWINGS

FIG. 1 is a diagram of the reporting of ticket sales in each of fivejurisdictions in their own currencies to the game administrator at theclose sales for a particular drawing.

FIG. 2 is a diagram of the reporting of the number of winners at eachprize level in each jurisdiction of FIG. 1 to the game administratorafter the drawing.

FIG. 3 is a diagram of the reporting by the game administrator to eachof the jurisdictions of the authorized payouts in each jurisdiction.

FIG. 4 is a diagram of the payments to subordinate prize winners and tothe Super Pool fund in four jurisdictions if there was no jackpot prizewinner.

FIG. 5 is a diagram of the flow of monies of the drawing resulted in asingle jackpot winner in Jurisdiction B.

DETAILED DESCRIPTION OF THE INVENTION

The amount of the jackpot prize and the subordinate prizes can bedifferent in each participating jurisdiction. These subordinate prizesmay be made pari-mutuel or fixed by jurisdiction. A determination ismade of each prize level for each jurisdiction as per the rules set bythat jurisdiction.

With reference to FIG. 1, upon the close of ticket sales prior to adrawing, each lottery jurisdiction (i.e., Lottery A-E) reports to thegame administrator its total sales for that drawing in its own currencyand the number of chances for the jackpot that are sold. That currencyis converted to a reference currency. Totals are made in the referencecurrency from all jurisdictions and allocated to the various prizelevels in the common game. After the drawing, each lottery jurisdictionreports to the game administrator the number of winners at each prizelevel (FIG. 2), and a determination is made of whether or not the grandprize jackpot has been won. Each lottery is notified if there is ajackpot and thus a Super Pool winner for that drawing (FIG. 3). If nojackpot prize is won all subordinate prize winners in each jurisdictionor group receive payment as per the rules of each respective lottery.The funds allocated to the jackpot prize are not awarded because thereis no winner, and are held in trust or in escrow after being convertedto the reference currency to form the Super Pool (FIG. 4). Note that itis anticipated that one or more financial institutions in eachjurisdiction or group may receive money from ticket sales in thatjurisdiction or country and payout or retain money, according to thegame rules.

As subsequent drawings progress, the jackpot pool continues to increaseuntil there is a jackpot winner in one of the jurisdictions. Eachjurisdiction according to its game rules is allowed to set a payoutceiling. When a jackpot win occurs, another mechanism comes into play.Of course, there is the possibility of having more than one jackpotwinner. The amount in the Super Pool at the time of the drawing isdivided by the number of lotteries selling jackpot winners anddistributed to the jurisdictions where the jackpot winning tickets weresold in equal shares. The amounts are reported to all participatingjurisdictions. Each jurisdiction that does not have a jackpot winnerpays the prizes for each prize level.

However, the jurisdictions that have one or more jackpot winners followa different procedure. Each jackpot winner is paid and any share of theSuper Pool remaining after the jackpot winning amounts are determined isused to supplement all subordinate prizes for that jurisdictionaccording to rates for that jurisdiction. FIG. 5 illustrates the processwhere there is a single jackpot winner in Jurisdiction B. Thejurisdictions that have lower jackpot ceilings will have inflated,possibly greatly, their subordinate prizes for drawings when a jackpotwinning ticket was purchased in their jurisdiction. Jurisdictions thathave no jackpot ceiling forego the gain in subordinate prizes butcapitalize on sales related to a high jackpot.

Table 2 is prize structure for a hypothetical lotto game similar to thePowerball® lottery game but with two numbers drawn from the second bininstead of one. The matrix is a 5/60+1/2/40, which is a combination of alotto game wherein 5 numbers out of 50 are chosen and a game, in thenature of what is sometimes in the industry called a keno game, in whichthe player may choose either 1 or 2 numbers out of 40. Given a selloutof the game where each chance purchased is unique, the prizes paid areillustrated according to rates where the percentage of sales allocatedto that prize is specified in the right hand column. TABLE 2 PrizeStructure for an Multi-Group (5/60 + 1/2/40) Game - One Play for $2Number of Prize Levels Prize Prize % Odds Winners Cash Cost Of SalesMatch 5 + 1 109,230,240.00 1.00 $65,817,661 $65,817,661 30.1279% Match 55,748,960.00 19.00 250,000 4,750,000 2.1743% Match 4 + 1 397,200.87275.00 5,000 1,375,000 0.6294% Match 4 20,905.31 5,225.00 1,0005,225,000 2.3917% Match 3 + 1 7,355.57 14,850.00 40 594,000 0.2719%Match 3 387.14 282,150.00 10 2,821,500 1.2915% Match 2 + 1 416.35262,350.00 7 1,836,450 0.8406% Match 2 21.91 4,984,650.00 — 0.0000%Match 1 + 1 64.05 1,705,275.00 5 8,526,375 3.9029% Match 1 3.3732,400,225.00 — 0.0000% Match 0 + 1 31.40 3,478,761.00 4 13,915,0446.3696% Match 0 1.65 66,096,459.00 ™ — 0.0000% Totals 1.00109,230,240.00 Total Prize Cost: $104,861,030 48.0000% Prize Reserve$4,369,210 2.0000% Overall 19.00 5,748,906.00 Return to Lottery:$109,230,240 50.0000% Odds:

For a given size jackpot and jackpot ceiling, the size of the individualsubordinate prizes paid from the Super Pool will be a function of thenumber of subordinate prize winners. Smaller jurisdictions will arguablyhave fewer winners to split the Super Pool and will have the largestprize inflation.

It is more than likely that different groups, and particularly differentgroups comprised of political jurisdictions, will have regulations inplace concerning the structure and payout of lotto games within theirgroup. For example, a group or jurisdiction may require that all lottogames played within the group have a pari-mutuel structure and/or aminimum or maximum prize percentage payout, which may differ from theprize percentage payout chosen for the multi-group lotto game. For thisreason, a new game design is proposed which would provide a multi-grouplotto game allowing for different prize structures and different prizepercentage payouts amongst the groups for the same game. In particular,the proposed game design would allow for participation by partner groupshaving pari-mutuel game payout structures and partner groups havingfixed game payout structures at differing prize percentages.

The jackpot prize is very rarely fixed. Rather, the jackpot prize isbased upon player participation and increases over periods of timeduring which the jackpot prize is not won and jackpot prize funds arerolled over from one drawing to the next. The subordinate prizes may,however, be set at fixed levels to encourage continued playerparticipation even when the jackpot prize is at a relatively low level,as for example immediately following the jackpot prize being won. Theactual prize percentage payout is variable and approaches a target levelonly over a statistically long period of time. For a group having apari-mutuel structure, the subordinate prize amounts are not fixed butrather are variable as well. The prize percentage payout target is fixedand is achieved on a cyclical basis. The cycles may be marked in termsof time, for example, weekly, monthly, or yearly, or on a per-drawbasis.

Table 3 lays out a prize structure applicable to a pari-mutuel partnergroup in such a lotto game. TABLE 3 Prize Structure for a Double Lottery(5/49 + 1/42) Game-One Play for $1 Average Prize Number of Levels Prize% of Odds Winners (30 yr GP) Prize Cost Sales Match 5 + 1 80089128.00 1$46,762,840 $23,381,420 29.1942% Match 5 + 0 1953393.37 41 $100,000$4,100,000 5.1193 Match 4 + 1 364041.49 220 $1,000 $220,000 0.2747 Match4 + 0 8879.06 9,020 $50 $451,000 0.5631 Match 3 + 1 8466.08 9,460 $50$473,000 0.5906 Match 3 + 0 206.49 387,860 $6 $2,327,160 2.9057 Match2 + 1 604.72 132,440 $6 $794,640 0.9921 Match 2 + 0 14.75 5,430,040 $00.0000 Match 1 + 1 117.99 678,755 $3 $2,036,265 2.5425 Match 1 + 0 2.8827,828,955 $0 $0 0.0000 Match 0 + 1 73.75 1,086,008 $2 $2,172,016 2.7112Match 0 + 0 180.00 44,526,328 $0 $0 0.0000 Totals 1.00 80,089,128 TotalPrize $35,955,501 44.8934 Cost: Overall Odds: 34.76 2,303,805 Return to$44,133,627 55.1066 Lottery:

The jackpot prize level (Match 5+1) is the same in all partner groups(Compare Table 1 to Table 6). The subordinate prizes, however, aregenerally lower and calculated according to a variety of methods, forexample as a generally lower preset fixed percentage of sales. In thismanner, the pari-mutuel group achieves a target prize percentage payoutof approximately 45% per cycle, as opposed to the 50% prize percentagepayout over a statistically long period of time illustrated in Table 1.The prize levels, however, are not fixed; the numbers represent averagesper cycle. In order to maintain equity in the price of purchasing achance in the jackpot prize in a pari-mutuel group versus the fixedpayout groups, all partner groups maintain an equal contribution perchance sold to the jackpot prize pool.

A lotto game according to the present invention may also providesubordinate prizes for which each prize level is a multiple of anotherprize level. For example, a first subordinate prize level is funded withone fourth the percentage of prize sales as the jackpot prize, a secondsubordinate prize level is funded with one fourth the percentage ofprize sales as the first subordinate prize level, and so on. Table 4lays out a prize structure in a pari-mutuel game in which each prizelevel is a multiple of another prize level. TABLE 4 Prize Structure fora Double Lottery (5/49 + 1/42) One Play for $1 Average Prize Number ofLevels Prize % Odds Winners (30 yr GP) Prize Pool Of Sales Match 5 + 180,089,128.00 1 $46,762,840 $23,381,420 29.1942% Match 5 + 01,953,393.37 41 $142,568 $5,845,305 7.2985% Match 4 + 1 364,041.49 220$6,642 $1,461,306 1.8246% Match 4 + 0 8,879.06 9,020 $41 $365,2860.4561% Others 18,545.72 — 0 $0 0.0000% Totals 1.00 9,282 Total PrizeCost: $31,053,317 38.7734% Overall Odds: 8628.43 Return to Lottery:$49,035,811 61.2266%

Instead of allocating a particular percent of the prize pool to aspecific prize category, the present design provides that a hierarchy ofprizes calculated, post-number selection, which would take into accountactual winners for each prize category and would establish that, forinstance, a match 4+1 winner be paid 4 times what a match 4+0 winner ispaid and 12 times what a match 3+1 winner would be paid, etc. Thisdesign ensures that it would be unlikely for a match 4+0 prizewinner towin more than a match 4+1 prizewinner.

Although the present invention has been described with reference topreferred embodiments, workers skilled in the art will recognize thatchanges may be made in form and detail without departing from the spiritand scope of the invention. In addition, the invention is not to betaken as limited to all the details thereof as modification andvariations thereof may be made without departing from the spirit andscope of the invention.

1. A prize pool for a lotto game played among a plurality of memberlotteries, at least two of which are from diverse groups, comprising: asystem of prize levels including a jackpot prize level and a subordinateprize level, wherein all member lotteries are eligible for the jackpotprize and wherein a first member lottery awards subordinate prizeshaving a pre-determined fixed monetary value and a second member lotteryawards subordinate prizes on a pari-mutuel basis.
 2. The prize pool ofclaim 1, further comprising a plurality of levels of subordinate prizes,wherein the second member lottery awards a first subordinate prize equalto a fixed percentage of a second subordinate prize.